Experts from across the Financial Services spectrum react to Trump’s tariff measures on the rest of the world
So now we know. President Trump has unveiled his long-anticipated so called ‘reciprocal’ tariff plan, branding it ‘Liberation Day’ as part of his broader ‘America First’ agenda. The policy, which targets all nations exporting goods to the U.S., has sparked very real concerns about retaliatory measures. It also sets the stage for a global trade war—one that would significantly disrupt markets and global economic stability. The threat of rising inflation in the US – as well as elsewhere – is obvious.
These new tariffs start from this Saturday, at 10% for some countries (including the UK) and upwards from there with the range of rates increasing to over 50% for China.
Markets have been in a spin for weeks, concerned about the impacts and the extent of what might be announced. That uncertainty won’t go away anytime soon. This is an incredibly significant change to world trade and one that advisers will have to consider carefully.
In the UK, Prime Minister Sir Keir Starmer has assured that Britain is “prepared for all eventualities,” as part of his PMQs statement yesterday. But with Chancellor Rachel Reeves already facing economic headwinds, these new trade barriers introduce fresh challenges.
As industry and political leaders react, financial advisers must assess the potential impact on global markets, investment strategies, and client portfolios.
Throughout the following article, we’re grateful to leading experts for sharing their insights on what these latest tariffs are likely to mean for businesses, investors, and the broader financial landscape.
Lindsay James, investment strategist at Quilter says: “Donald Trump wants the richest economy in the world to be even wealthier, and tariffs are going to be his primary way of achieving this. A universal baseline tariff of 10% will apply from tomorrow, with certain industries and countries targeted with even higher rates. The President said his administration is being ‘kind’ by providing discounts on what they believe the effective tariff rate is on US products. Perhaps this is a sign that Trump still cares about what the market thinks, but a more cynical view may suggest he could come back for more and raise tariffs further, particularly if countries retaliate following this announcement.
“For the UK, facing a 10% tariff, it has perhaps got off more lightly compared to other countries and the European Union. But this is still significant and will hit industries hard, particularly given the likes of car manufacturers face an even harsher rate. Whether or not this latest round of tariffs is additional to those already announced remains uncertain, as does the extent of any opportunity to negotiate.
“Trump has made it clear that this is the end of the established economic order, and he wants America calling the shots. These tariffs are stark and perhaps more aggressive than many in the market had been expecting. Indeed, Trump scheduled this press conference for after the stock market closes for good reason, with the US futures market falling sharply as a result of this speech.
“Ultimately, Trump is playing a high risk game. He is risking stoking a fresh inflationary spiral in the hope that over time jobs and industry are restored to the US. This is following an election campaign where he promised to lower inflation and bring interest rates down. But, tariffs have rarely ended in positive outcomes, and signs are already pointing to weakening consumer and business sentiment and the risk of a slowing US economy.
“Trump continues to tout tax cuts, but there remains very little detail on what this means or when they will come about. Markets will be wanting more detail on both this and further deregulation, and given the scale of these tariffs that may need to come sooner rather than later for US equities. For businesses it remains a very volatile and uncertain economic period, and this will be reflected by markets for the time being. Investors will need be patient and calm, staying invested for the long-term.”
Nigel Green, CEO of global financial advisory giant deVere Group, says “peddles in economic delusion” and risks triggering a dangerous global slowdown.
“This is how you sabotage the world’s economic engine while claiming to supercharge it,” he says.
“It’s a seismic day for global trade. Trump is blowing up the post-war system that made the US and the world more prosperous, and he’s doing it with reckless confidence.”
At a blustery Rose Garden event, Trump unveiled a 10% across-the-board tariff on all imports, alongside targeted tariffs of 34% on Chinese goods, 20% on European products, 24% on Japan, and 10% on the UK.
Declaring April 2nd as “Liberation Day” for American trade, Trump said the new policy would “make America wealthy again.”
But economists and markets are sounding the alarm.
“Tariffs are taxes—plain and simple—and American consumers will bear the brunt,” notes the deVere Group chief executive.
The reality is stark: these tariffs will push prices higher on thousands of everyday goods—from phones to food—and that will fuel inflation at a time when it is already uncomfortably persistent.
The OECD recently warned that if the US and its trading partners raise tariffs by 10 percentage points, global GDP could fall by 0.3% within three years, while inflation could rise by an average of 0.4 percentage points each year over the same period.
“This plan can be expected to directly increase the cost of living in the US,” explains Nigel Green. “Wages won’t keep up with price hikes, and the squeeze on households will likely be intense.”
Confidence, investment, and growth are already under threat.
Even before today’s shock announcement, the threat of protectionism had begun to drag down global sentiment. Now, that uncertainty is hardening into reality.
“When businesses don’t know what trade will look like next quarter, they stop hiring, stop investing, and freeze plans. That ripples through to consumers. This chilling effect is how recessions begin,” warns the global business leader.
Global borrowing costs are climbing in the wake of trade disruption.
The announcement is also stoking fears in bond markets. Governments already struggling under pandemic-era debt are facing higher borrowing costs as yields rise in response to the uncertainty and inflation threat.
“This is a body blow to fragile fiscal frameworks,” Nigel Green affirms. “For nations still recovering from years of shocks—financial, pandemic, geopolitical—Trump’s trade war is a major setback.”
He continues: “The dollar’s dominance is also no longer a sure thing. America’s credibility is on the line. With the dollar as the global reserve currency, any whiff of unpredictability or politicized policy makes global investors nervous. That trust is hard-earned and easily lost.”
The deVere CEO notes that while Trump is presenting his move as a patriotic correction to trade imbalances, the actual result could be long-lasting damage to America’s economic leadership.
Back peddling is “inevitable”, predicts the chief executive.
“Economic gravity will kick in. As the costs become clear and the political pain sets in, we expect a backpedal and/or reversal of many tariffs within 12 months. The markets, the public, and eventually even the policymakers won’t accept these self-inflicted wounds.”
For now, the world must reckon with the fallout from what “may become one of the most disruptive moments in trade history.”
Nigel Green concludes: “It would appear that Trump is peddling in economic delusion. But the global economy runs on reality—and the reality is that this will likely cause harm on a scale that can’t be spun away.”
Richard Carter, Head of Fixed Interest Research at Quilter says: “As markets digest Donald Trump’s harsh tariffs, it is clear these rates were much more punitive than the market was expecting. Trump spoke sternly on the need to right the wrongs of the past and make America wealthy again, but in the short-term what this has done is stoked an already tense global trade situation and increased the chances of a major slowdown in growth both in the US and globally. The chances of a recession in the world’s largest economy have now increased to the point where the market thinks it is likely. How Trump spins this, and the fact these tariffs will add to the inflationary fire, is anyone’s guess.
“Markets, unsurprisingly have reacted badly. Treasury yields have fallen sharply, as investors take flight and look for safe haven assets. This would suggest the Federal Reserve will need to put additional rate cuts on the table to look to prevent that recession being triggered, but should it face inflation rising too, it is in somewhat of a bind. Any hint of stagflation puts the soft landing that was achieved post-Covid very much in doubt. The jobs data is going to be key, with a first hint tomorrow likely to reveal how employers have been responding to Trump’s moves so far. While it won’t yet reflect any of the tariff moves, it will give an indication of how robust the jobs market is and whether it can withstand a downturn in growth.”
Douglas Grant, Group CEO of Manx Financial Group, said: “The latest tidal wave of global tariffs marks the start of a turbulent period for international trade. With the Trump administration’s unpredictability, nothing can be taken for granted. For UK SMEs already grappling with high interest rates and persistent inflation, cashflow preservation must be a top priority.
“Labour’s belt-tightening Spring Budget, coupled with a sluggish domestic economy and an investment freeze dragging into its fourth month, underscores the need for smarter financial strategies. Prolonged inflation keeps interest rates elevated, delaying business investment and adding to the strain. To navigate these challenges, SMEs must rethink their financial strategies. Frequent budget reviews, agile supply chains, and strategic bulk purchasing can help mitigate cost pressures, while digital adoption and operational efficiencies can drive productivity. Encouragingly, Manx Financial Group data shows nearly a third of UK SMEs have scaled back or paused operations due to financial constraints, down from 40% in 2023, though 10% still struggle with financing access.
“As the backbone of the economy, SMEs need a stable, supportive funding environment. Labour’s pro-growth rhetoric has yet to translate into meaningful reforms that improve financing access. Both traditional and alternative lenders play a crucial role, but without adequate capital, the recovery risks stalling under the weight of rising taxes, geopolitical uncertainty, and the ongoing cost-of-living crisis.”
Paul Diggle, Chief Economist, at Aberdeen said; “There is a meaningful risk that the announcements yesterday, as dramatic as they were, do not represent “peak tariffs”. We still think additional sector specific tariffs are coming, including on semiconductors, copper, lumber and pharmaceuticals.
Indeed, these products were mentioned in the executive order, specifying that the reciprocal tariff policy does not apply to them, therefore leaving open that specific rates will be coming soon. On the other hand, that does seem to mean that sector-specific tariffs and reciprocal tariffs aren’t additive.
Additionally, the Executive Order provides the President with the right to modify tariff rates in the event of retaliatory measures, meaning rates on some trade partners could be pushed higher still.
There is still scope for US tariffs to eventually settle at a lower level, and this is probably still a widespread expectation.
The 10% global baseline is likely a floor, but structuring the reciprocal tariff as an additional rate on top of that at least leaves some chance of it then coming down.
So far, the administration appears far more tolerant of market weakness than in Trump’s first term. Indeed, low bond yields and a weaker dollar may be actively helpful market moves give the administration’s preferences.
The net impact on the US economy will almost certainly be stagflationary, although the magnitudes of the price level increase and GDP hit are hard to pin down.
The shock to growth and inflation is sensitive to whether tariffs are perceived as temporary or permanent, the scope for firms to absorb price rises in their margins, currency moves, and how financial markets react, among other things.
A crude rule-of-thumb is that every 1 percentage point increase in the US weighted average tariff rate translates into a 0.1 percentage point rise in the price level and knocks 0.05-0.1 percent off GDP. This would suggest that the full increase in US tariffs yesterday and in recent weeks could add 2% to the price level and push GDP down by 1-2%.
There is a potential for some offsetting economic benefits if the roughly $0.6 trillion (~2% GDP) which could be raised by the tariffs finance tax cuts rather than deficit reduction. However, if the revenue is “used” in this way, it would make negotiating away the tariff increases in the future more difficult.
The Fed faces a difficult trade-off. Policy makers have previously talked about tariffs having only a “transitory” impact on US inflation, but given the recent sharp increase in inflation expectations it may be difficult for the Fed to look-through this impact.”
